Wal-Mart shares have tumbled 2 % because their earnings pop in mid-February, and the charts are pointing to even extra soreness for the retail giant.
That’s at minimum according to AlphaShark’s Andrew Keene, who thinks Wal-Mart could fall to its lows from May possibly 2015, specially as “retail has been really, really weak throughout the previous couple of weeks.”
On a daily chart of Wal-Mart, Keene reported that the retailer’s shares are viewing “resistance” at $seventy two. “It has uncovered resistance several periods at the $seventy two level and each and every time it strike $seventy two, about time it sold off,” he reported Tuesday on CNBC’s “Investing Country.”
This prospects Keene to consider Wal-Mart shares could fall to all over $sixty five, just slightly beneath its February lows. This implies that Wal-Mart is established for a 7 % fall in the coming months.
To consider edge of a transfer down for Wal-Mart, Keene wants to buy the May possibly monthly sixty seven.five-strike places and offer the May possibly monthly sixty five-strike places for a full of 77 cents, expiring May possibly 19. “If Wal-Mart goes to underneath $sixty five on May possibly expiration, this distribute would be really worth $2.50,” reported Keene. “That’s very good for three ½ periods my cash.”
Wal-Mart is currently up about 1 % year to date, dropping off from a higher of $seventy two.39 as section of its post-earnings run.
Correction: Keene wants to offer the May possibly monthly sixty five-strike places. An before edition misstated the cost.